World: Budweiser setting its sights on being the "King of Non-Alcoholic Beers"
At Budweiser, the "King of Beers" is setting its sights on being the "King of Non-Alcoholic Beers," according to one top beverage analyst, AOL reported on December 12.
"Alcohol-free beer is a key growth segment, with the company continuing to invest behind growth of Budweiser Zero as well as opening the platform for craft breweries as well," Evercore ISI's Robert Ottenstein wrote in a new note.
Ottenstein shared observations from a Beverage Digest presentation he attended last week, where AB InBev management discussed major growth drivers such as non-alcoholic beer and hard seltzers.
"Stigmas behind non-alcoholic [beer] from consumers have been falling, led by Europe but now seeing similar trends in the U.S. as well," Ottenstein added.
The analyst has an Outperform rating on AB InBev with a $70 price target, implying an upside of 17% from current levels.
Budweiser Zero — which contains no alcohol, as its name implies — debuted in the summer of 2020. And that launch was well-timed.
Total dollar sales of non-alcoholic drinks in the U.S. stood at $395 million, up 20.6% year over year, through August of this year, according to data from NielsenIQ. Non-alcoholic beer made up 85.3% of that total sales figure, with a market valued at $328.6 million, up 19.5% year on year.
"Younger Gen Z consumers are less interested in drinking alcohol than previous generations," NielsenIQ explained about the strength in non-alcoholic beer sales. "But there has also been a wider wellness movement taking place throughout society, with more people from every age and stage of life trying to take better care of themselves."
For AB InBev's part, its Beyond Beer segment, comprised of various hard seltzers and beer alternatives, saw sales rise 10% from a year ago in the most recent quarter. The momentum helped the company handily beat analyst sales and profit projections for the quarter.
"You should definitely try Budweiser Zero — it's amazing," AB InBev CEO Michel Doukeris said on Yahoo Finance Live.
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